Employment

Employment-oriented secondary education explains much of the high employment rate and low unemployment among Germany’s young. Half of them go through vocational studies and, among them, almost all do work practices in companies. In the context of possible collaboration with Germany, even more important that promoting new investments, is to make German companies based in Argentina to contribute to the widespread growth of the vocational education.

The government presented a draft bill seeking to incentivize formal employment. In the draft lies the recognition that economic growth and tighter controls alone are not enough to reduce informality. Reforms to labor institutions with special emphasis on small enterprises can help to solve the problem. In any case, Congress should enhance its design since, as it is conceived, will repeat frustrations.

The acceleration of inflation suggests that the cycle of expansion based on consumption stimulation has ended. This is a situation that was already experienced in the past; the only peculiarity now is that the cycle was longer due to the unprecedent international favorable context. But the final result is similar: stagnation of employment and wage increases that do not compensate for inflation. To overcome the situation a deep transformation of the public sector, that encourages investment and job creation, is needed.

Due to the persistent drainage of reserves, authorities announced a new exchange rate policy together with a new social program, called “Progresar” which intends to alleviate the marginalization suffered by millions of young people. Authorities are still unaware that exchange rate volatility is associated with excessive and badly managed public spending and that the only viable solution is a deep public sector transformation. Nevertheless, more alarming is the idea of inducing thousands of young people, in the beginning of their productive life, to become dependent on state paternalism.